What is a "rate lock period"?
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Lock It In
A rate "lock" or "commitment" is a promise from the lender to set a specific interest rate and a certain number of points for you for a certain period of time while your application is processed. This protects you from getting through your entire application process and finding out at the end that your interest rate has risen higher.
While there are various lengths of rate lock periods (from 15 to 60 days), the extended ones are typically more expensive. The lender can agree to freeze an interest rate and points for a longer period, say sixty days, but in exchange, the rate (and sometimes points) will be more than with a rate lock of fewer days.
More Ways to Get a Great Interest Rate
In addition to going with the shorter lock period, there are more ways you can get the lowest rate. The larger the down payment, the lower the interest rate will be, as you will be starting with more equity. You can pay points to improve your interest rate for the term of the loan, meaning you pay more initially. For a lot of people, this makes financial sense..
At Community Mortgage Corp., we answer questions about this process every day. Call us at (630) 534-5500.